8 Top Casino Stocks: What's the Riskiest Bet?

(Casino preview updated with Ameristar Casinos results.)

NEW YORK (TheStreet) -- Let's be honest, any real surprises within the casino sector in the second-half of the year will almost surely come from Asia. As it stands, the U.S. domestic market appears to have little luck left.

Because while the risk for U.S. casino hotels has subsided from its peak in 2009, it remains at unsettling levels. IBISWorld holds a risk rating of 5.02 for the sector into 2011, which compares with 6.5 last year. The economy as a whole currently has a risk score of 6. IBIS measures risk across sectors, with 1 being the least risky and 9 having the most risk.

Casino stocks have been fickle over the second quarter, plummeting in May as the euro and other macro-economic concerns weighed on the sector. Since then there has been a significant rally, and these stocks, for the most part, have normalized.

The second-quarter was spent attempting to offset some of the declines in consumer spending seen over the past year by lowering costs and restructuring balance sheets. "But these are all band aids," says Alex Calderone, who provides turnaround and crisis management services for the gaming sector at Conway MacKenzie. "If a true economic rebound doesn't take place within the next 12 to 18 months, we will see casinos start to shutter. There is a runway that exists, but the plane needs to get up in the air before that runway ends."

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Calderone says two things have to happen before a casino recovery: employment growth and a rebound in the housing market, which makes a near-term recovery unlikely.

>>Interactive Map: Casinos of the World

Las Vegas, once the epicenter of the gaming world, is losing its glimmer. Nevada has the highest unemployment rate in the nation and the housing decline in the state is among the worst in the country. Convention business, which makes up a significant chunk of revenue on the Strip, is seeing an uptick in booking and the ability to modestly increase room rates, Calderone observes. But with the possibility of even more supply in the pipeline with the pending opening of Cosmopolitan in December, this doesn't bode well for revenues.

Analysts are predicting that it will be well into 2011 before a real recovery is evident in Las Vegas. This means stocks with significant exposure to Nevada are especially susceptible.

When it comes to the regional markets, the next half of the year should sound very similar to outlooks heard at the beginning of the year. Some markets, like Atlantic City, are feeling pressure from new competition. As some regions get richer, others are getting poorer. All of which makes Asia, specifically Macau and Singapore, the only real source of growth potential.

"The proverbial rising tide that lifted the gaming sector has come and gone," Calderone says. As such, it is becoming increasingly more important for investors to pay attention to the fundamentals of individual casino companies, rather than buy into the sector as a whole on any sign of a potential rebound. Given this, here is a breakdown of which casino stocks are worth a bet in the second-half, and which you should fold....